Metromedia Fiber warns of possible bankruptcy :-(

Mon Mar 18 18:19:30 UTC 2002

http://biz.yahoo.com/rf/020318/n18135659_1.html

Monday March 18, 9:49 am Eastern Time

Metromedia Fiber warns of possible bankruptcy
(UPDATE: Adds details)

NEW YORK, March 18 (Reuters) - Metromedia Fiber Network 
(NasdaqNM:MFNX - news), which provides high-speed communications 
services in cities, on Monday scrapped its financial guidance through 
the end of 2002, and warned it may have to file for bankruptcy if it 
cannot restructure its debts.

The New York-based company, in a press release, also said it had 
deferred payment of about $30 million of interest due on $975 million 
of convertible notes issued to local telephone company Verizon 
Communications(NYSE:VZ - news) in order to meet other near-term cash 
requirements.

Metromedia said it is in talks with Verizon but could default on its 
debt if it fails to reach an agreement or make an interest payment 
within a 30-day grace period.

Metromedia said it is seeking to restructure its debts. As of Feb. 
28, it had $3.3 billion of consolidated debt and about $37.3 million 
in cash. A restructuring could substantially dilute the value held by 
stockholders, the company said.

The downturn in the telecommunications industry triggered the recent 
bankruptcies of Global Crossing Ltd. (Other OTC:GBLXQ.PK - news) and 
McLeodUSA Inc. (NasdaqNM:MCLDQ - news) The sector has been hurt by a 
glut of high-speed network capacity, scant demand in the weak 
economy, price wars and stiff competition.

To raise cash, Metromedia said it plans to sell the facilities of its 
Internet exchange, PAIX, for about $50 million cash and an equity 
interest in the buyer. A substantial part of the proceeds from the 
sale, expected to close in the second quarter, will be used to pay 
down debt, it said.

The company said it continues to explore other options to satisfy its 
near-term and medium-term liquidity needs.